‘Post-Viom deal, India will be a billion-dollar biz for ATC’

Thomas K Thomas Mumbai | Updated on January 20, 2018

JAMES TAICLET, Chairman, President and CEO, of ATC

With 56,000 towers, India to be the largest operations for us, says James Taiclet, Chairman

With the Centre approving American Tower Corporation’s acquisition of majority stake in Viom Networks, the Boston-based tower infrastructure firm is set for a bigger play in the Indian telecom sector.

With this acquisition, ATC will own 56,000 towers in India, making it the largest operations for the company overtaking its US business where it manages around 40,000 towers. Having entered the Indian market in 2007, ATC is now looking to build scale to ride on the telecom operators’ need for more tower sites for 3G and 4G roll out. BusinessLine met James Taiclet, Chairman, President and CEO of ATC, on the company’s future roadmap in India. Edited excerpts:

What does the Viom acquisition mean for ATC?

It attains our goals to be the No.1 independent tower company in the country. The integration will take a year or two. India becomes incredibly important for us. This transaction will make it a billion-dollar business for us for the calendar year 2016. From asset perspective, this is the largest number of towers we have anywhere in the world.

Have you initiated discussions with the Tatas to acquire the balance stake in Viom?

That’s a future discussion. The purchase sale agreement there is a provision for that discussion.

Why has it taken ATC seven years after it entered India to scale up?

We have caught the wave at the right time. Between 2010 and 2013, the industry came to a grinding halt due to licence cancellation and issues related to network equipment import ban. Scaling up prior to that would have meant scaling up at a high cost. We have a disciplined programme of valuing telecom assets. There were deals which went for $200,000 a tower at that time. Meanwhile, our business has performed well despite these regulatory uncertainties. We are now ready to catch the wave that will come from 3G and 4G roll outs by telecom operators like Vodafone, Reliance Jio and Airtel.

Will 56,000 towers be enough to capture significant market share?

At this scale, we are positioned to capture significant share of the market. In addition, we are ready to bring best practices and IP. Viom is also run professionally so it will make us competitive.

What kind of IP could you bring to India?

Tower management is important part of working in Africa and Asia. Managing generator performance, for example, is critical since electricity is not available everywhere. As the tower provider, we are then responsible for this.

Our uptimes are better than the industry average. We know how to configure the site, and use things like voltage regulators, to make uptime better. We have the funds and the programme to do this. There is also whole art of co-location. There is a fair amount of science in understating tower capacity, space, load available and customer priorities.

Companies are also looking to deploy solutions other than towers. For example, some are laying optical fibre, others are using Wi-Fi zones, Google has its Loon project. Do you see this as a threat?

These solutions don’t compete with us but if any of these compliments with our tower business we are open to investing in that. For example, in indoor small cells we are the leader in almost all countries we operate. We are investing in it because it gets us tower-like returns. Viom has about 300 such sites and ATC has about 60 in India. This is an area of focus for us because it enables telcos to offload data.

Will such solutions help you shore up better revenues from India?

Leasing towers, our traditional business, will drive the growth primarily but this will be complimented by these kind of solutions. As of now, 75 per cent of our cash flow comes from US because it’s been the oldest market for us and the pricing is higher than India. We now have 1,40,000 towers around the world post Viom deal. Two thirds of this is outside US and this is growing faster. The US generates cash, but there is more towers internationally. Some day in the future the international business may exceed US cash flows. We see significant growth of revenues from India.

You had initiated a project called Village of the Future in India. What is the status?

Village of the Future concept is like a digital square. We use the tower site which has electricity, security and internet backhaul to do things like putting an ATM at the tower site. You could put e-medicine kiosk there to connect doctors in urban hospitals with patients in rural areas. One of things we are doing is putting education kiosks. We have 30 such operational sites. We want to scale it up. We want to do more but we need to partner with others. By this year-end, we would have 60 such sites of which 30 would be more than education including tele-medicine.

Post-Viom, do you have an appetite for more acquisitions in India?

We will take 1-2 years for integrating Viom. We also want to simplify customer contracts. Once this is completed we would aspire to look for additional opportunities.

Have you finalised the structure of the merged entity?

Amit Sharma (current head of ATC’s India and Asia operations) will be leading the combined business. He will have three roles — head of ATC Asia and India subsidiary, he is also head of Viom because initially it will be a separate company for a year and he will be the head of the virtual organisation that will oversee policy and integration activities. We will have a board of directors that will oversee Viom JV. Number of other executives from Viom and ATC will lead specific functions.

It’s complicated but we have done this before. Viom has good talent and our team at ATC has been readying for this big game for over five years.

Published on April 06, 2016

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